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Zhannaxena, Certified Public Accountant (CPA)

Category: Tax

Satisfied Customers: 42

Experience: I am a NYS CPA as well as a CIA, CRMA and Licensed Real Estate Agent.

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I own an S-Corp.
I showed a net loss of $7129 on last years

Customer Question

I own an S-Corp. I showed a net loss of $7129 on last years tax return and have a carryover loss of $8187 form the previous years tax return.My queation is this.If I take a full time job on the books and apply these losses towards deductions or dependants, what will my annual salary have to be for me to take home $925 a week? The company is located in New York City but I am not a resident and they pay bi-monthly.

3. Do you take an itemized or standard deduction annually? If itemized, how much?

Zhannaxena :

Let me know - thanks.

Customer:

I am divorced and have one child. My ex-wife and I alternate claiming her. The upcoming year isn't my turn.

Customer:

I am a resident of Nassau County.

Zhannaxena :

Hello

Zhannaxena :

Ah ok, so let me do the calculations then:

Zhannaxena :

So $7129 plus $8187 = $15,316 in operating losses

Zhannaxena :

are you the sole owner of this S corp? All these losses go to you?

Customer:

I don't know the answer to your third question. How would I find out? Can I look on my copy last years tax return? Corporate or personal ?

Zhannaxena :

oh I mean, do you run this business alone or with others?

Zhannaxena :

or are you a passive investor in the S corp?

Zhannaxena :

do you receive a K-1 at the end of the year?

Customer:

Yes, I am the sole owner. I would love to split the losses over the next 2 years if I take the new job.

Zhannaxena :

And another question, why is there a carryover loss? Did your accountant classify this as passive income or active income?

Zhannaxena :

Passive income means this is more of an investment for you.

Zhannaxena :

Active income means you actively participate in running this business.

Zhannaxena :

(are you having trouble with this chat?)

Customer:

I don't know. where on the tax return can I find out ???

Zhannaxena :

Ok, do you have the return with you? Do you see a Schedule E on your tax return?

Customer:

hold on.

Zhannaxena :

The reason this is important is because passive losses can only offset passive income. Active losses can offset ordinary income, like wages. I have a feeling that the reason you have a carryover is because it's a passive loss.

Zhannaxena :

Sure, take your time.

Customer:

I have an 1120S, 1125A, and schedule K-1

Zhannaxena :

Ok great, where on the K-1 does it show the loss - which box #?

Customer:

i also see CT-3S and CT-34-SH

Zhannaxena :

Yeah that's fine, those are NYS s-corp schedules

Zhannaxena :

I am more interested in the K-1 and where the loss appears, which box is it in?

Customer:

okay. On for K-1 (form 1120S) the loss is on line 1. Then again on K-1 (form CT-3-S) it's on line 11.

Customer:

Where are you located ???

Zhannaxena :

I am located in NYC. I live in Queens.

Zhannaxena :

Why?

Zhannaxena :

Line 1 - excellent, ordinary business loss.

Zhannaxena :

Ok, it should apply against ordinary business income then - thanks.

Zhannaxena :

Ok, let me do the calculation then.

Customer:

Nothing. I just like you : )

Zhannaxena :

Oh, well, thank you, XXXXX XXXXX it. :)

Zhannaxena :

ok, so here it is, the government is going to take about 25% via federal and NYS taxes

Zhannaxena :

You can make up to $79450

Zhannaxena :

Here is the math: $79,450 - $15316 = $64134

Zhannaxena :

$64,134 * 0.75 = $48,100

Zhannaxena :

$48,100/52 weeks = $925 per week

Zhannaxena :

(I am assuming you get paid 52 weeks per year)

Zhannaxena :

Does that answer your question?

Customer:

Sorry. I am confused.

Zhannaxena :

Hi, sure, what are you confused about>?

Zhannaxena :

Your annual salary should be $79450 in order to take home $925.

Zhannaxena :

(per week)

Customer:

So I my anual salary would have to be $79, 450 to take home $925 a week with my losses?

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. OrvilleHesperia, California

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